Shed on a Pole is wrong.
MAG absolutely can just order airlines to move terminals, it happens quite a lot. Given MAN is not really a hub for any alliance it doesn't matter what terminal they're all in and to be fair, even some parts of the business are challenging the needs of the big alliances anyway. I don't think they'll be phased out, but there's almost no value in having BA/EI/VY colacated for the tiny amount of traffic they'll be connecting. Something is wrong with your day if you need to fly DUB-MAN-Vueling! There are better, more direct options just as people no longer ought to fly MAN-LHR-Europe for the most part.
Offering MAN long haul should not impact MAD/LHR/DUB as the likely routes have been offered for years so hardly likely to impact growth plans. A great shame that American's once reliable MAN op has been reduced to something BA of all people look like picking up, and this time with very little pressure from the London end, this is self inflicted from the US.
Btw SirHumphreyNorth, you also seem very familiar.....